World Bank to attempt and rectify Syria's economic toll on Lebanon

The World Bank is looking into establishing a Multi Donor Trust Fund to support Lebanon after its government requested a swift assessment of the social and economic impact of the Syrian conflict on the country.

The World Bank is looking into establishing a Multi Donor Trust Fund[2] to support Lebanon after its government requested a swift assessment of the social and economic impact of the Syrian conflict on the country, a source close to the discussions told The Daily Star.

The assessment, which will tackle needs in the health, education, tourism and trade sectors, will be presented at an international support group for Lebanon on the sidelines of a Sept. 25 meeting of the U.N. General Assembly.

The number of registered Syrian refugees in Lebanon topped 720,000 this week, according to the latest report by the U.N. High Commissioner for Refugees, while Lebanese officials say the number exceeds 1 million when taking into account unregistered Syrians residing in the country.

Despite the rising influx of refugees[3], the Lebanese state has yet to draft a comprehensive plan to meet increasing needs, particularly in the health and education sectors.

The World Bank is close to concluding its assessment of such needs and will be ready to present the report on time for the U.N.-sponsored meeting, the source said.

“The focus of the World Bank will be to support developmental projects within host communities rather than to provide humanitarian aid to refugees, which falls under the mandate of U.N. agencies,” the source added.

The presentation of the assessment at the U.N. will pave the way for a second phase of discussions that will tackle the possible establishment of an MDTF to finance developmental projects, the source said.

The Lebanese government has so far failed to take concrete steps[4] to deal with priority issues such as an expected doubling in the number of students ahead of the start of the new academic year later this month, and providing health care to limit the risk of any potential outbreak of communicable diseases.

Raising further concerns is the prospect of a massive influx of refugees if the U.S. and its allies decide to go through with military strikes on Syria.

The source said the establishment of the MDTF under the supervision of the World Bank will provide a mechanism to meet existing and arising needs in the absence of any comprehensive governmental plan to cope with the crisis.

But a big question mark remains concerning the extent of aid that donor states will be willing to commit to support Lebanon, the source added. “The donor state appetite to commit aid to Lebanon remains to be seen as the World Bank is expected to only contribute a small percentage to the fund.”

Asked whether a World Bank loan to the Lebanese government was an option on the table, the source ruled out such a possibility, citing both Lebanon’s high debt-to-GDP ratio and the politically divisive issue of incurring the cost of hosting refugees as major hurdles.

A loan agreement would also require the approval of Parliament, which has failed to convene recently due to political bickering over its agenda, while the establishment of an MDTF requires only the approval of the Cabinet.

So far, the EU commission and the U.K. government have unilaterally provided Lebanon with aid for refugees.

As a result of a massive shortfall in funding, the U.N. refugee agency will cut food aid to more than a quarter of Syrian refugees in Lebanon starting next month, UNHCR spokeswoman Roberta Russo said Wednesday.

Russo addedthat the UNHCR had received from aid agencies only 27 percent of an estimated $1.7 billion needed to provide refugees with basic assistance, education and health care.

The U.N. agency earlier proposed establishing lightweight housing units to accommodate Syrian refugees but was met with strong opposition from some Lebanese parties.

Those opposed to the proposal fear that organized accommodation of refugees, most of them Sunnis, would encourage them to remain in the country permanently, dealing a blow to Lebanon’s delicate sectarian balance.